Suven Pharma stock can surge up to 19% from here; check key levels

Technical charts suggest that Suven Pharma may trade with a positive bias in the near-term, provided the stock manages to hold above these key support levels.

Suven Pharma stock has under-performed both its benchmark NSE Smallcap index and the sectoral Nifty Pharma index so far this year. The stock has shed 13.5 per cent as against a rally of 8 per cent on the SmallCap index and a 10.5 per cent gain on the Nifty Pharma.

The stock has underperformed owing to sub-par earnings in the December quarter. Suven Pharma company posted a profit of Rs 5.24 crore for the December 2023 quarter, down 52.1 per cent when compared with a profit of Rs 10.95 crore in the corresponding quarter a year ago. Total income declined by 37.2 per cent year-on-year (YoY) to Rs 22.68 crore from Rs 36.10 crore in the same period.

Suven Pharmaceuticals is a demerged arm from Suven Life Sciences. The bio-pharmaceutical company is engaged in the business of development and manufacturing of New Chemical Entity (NCE) based Intermediates Active Pharmaceutical Ingredients (API) Speciality Chemicals and formulated drugs under contract research and manufacturing services for global pharmaceutical biotechnology and chemical companies.

On February 29, the company's promoter firm - Advent PE announced the merger plan of Suven Pharma with Cohance Lifesciences. As per the scheme of amalgamation, all shareholders of Cohance will be issued 11 shares of Suven Pharma for every 295 shares held in Cohance.

Suven Pharma in an exchange filing had said the merger shall establish the company's position as a diversified CDMO and API leader in India, transcending our current revenue base.

Meanwhile, technical charts suggest that Suven Pharma stock may trade with a positive bias in the near-term, provided the stock manages to hold above these key levels.

Here are the key technical levels to watch out for on Suven Pharma stock

Current Price: Rs 627

Upside Potential: 19%

Support: Rs 598; Rs 590; Rs 555

Resistance: Rs 675
 

Since February, Suven Pharma stock has taken support around its weekly super trend line on multiple occasions. The support now stands at Rs 590, and key momentum oscillators are showing signs of likely turnaround in the near future. Similarly, the super trend line supports the longer-term scale, i.e. the monthly chart shows presence of strong support around Rs 555.

As such, these two support levels can help the stock limit downside risks from current levels. On the positive front, the stock can potentially rally to Rs 746 levels, with some resistance seen at Rs 675, shows the weekly chart. CLICK HERE FOR THE CHART

On the daily scale, the stock is within striking distance of its 200-DMA (Daily Moving Average) which stands at Rs 598. Although, the price-to-moving averages seems negative on the daily scale; presence of multiple major support levels near the current price coupled with likely turnaround on key momentum oscillators on the weekly scale, suggests that the risk-reward ratio seems to be favourable for the stock.